CD Rate Calculator

Deposit Amount

Minimum varies by bank ($500–$1,000)

Annual Percentage Yield (APY)

Use APY, not APR — banks advertise APY

CD Term

Compounding

Penalty

months interest

Typical for 12-mo CD: 3 months

If Withdrawn After

months

How long you'd actually hold it

Total Value at Maturity

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Initial Deposit

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Interest Earned

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Effective APY

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Monthly Interest

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Daily Interest

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Maturity Date

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Early Withdrawal Scenario

Interest earned by month ——

Early withdrawal penalty—

Net amount received—

Effective annual yield (early)—

How CDs Work

A Certificate of Deposit (CD) is a savings product offered by banks and credit unions with a fixed interest rate and a fixed term. In exchange for locking up your money for the agreed term, you receive a higher interest rate than a standard savings account. At maturity, you receive your original deposit plus all earned interest.

CD Terms and Typical Rates (2026)

3-month CD: 4.50%–5.00% APY — good for very short-term parking
6-month CD: 4.75%–5.25% APY — most popular for short-term savers
1-year CD: 4.50%–5.50% APY — sweet spot of rate vs liquidity
2-year CD: 4.00%–5.00% APY — rates often similar to or below 1-year in 2026
5-year CD: 3.50%–4.50% APY — lower than short-term in current inverted yield curve

Note: The yield curve is currently inverted — short-term CDs often pay more than long-term CDs. Shop rates at multiple banks before committing.

The CD Ladder Strategy

A CD ladder splits your total deposit across multiple CD terms (e.g., 1-year, 2-year, 3-year, 4-year, 5-year). As each CD matures annually, you reinvest it into the longest term. Benefits:

You access a portion of your money every year without penalties
Over time, all rungs become long-term CDs earning higher rates
You average out interest rate risk — if rates rise, you capture higher rates as short-term CDs mature

Early Withdrawal Penalties

Breaking a CD before maturity triggers a penalty — typically measured in months of interest. Standard penalties by term:

3-month CD: 1–3 months of interest
6-month CD: 3–6 months of interest
1-year CD: 3–6 months of interest
2-year CD: 6 months of interest
5-year CD: 12–18 months of interest

For short holding periods, the penalty can actually eat into your principal — not just your interest. The Early Withdrawal Scenario above shows exactly what you'd net.

Frequently Asked Questions

Are CDs FDIC insured?

Yes — CDs at FDIC-insured banks are protected up to $250,000 per depositor, per bank, per ownership category. Credit union CDs are insured by NCUA to the same limit. If you have more than $250,000 to deposit, spread it across multiple banks to maximize coverage. Joint accounts are covered up to $500,000 (each owner's $250,000 share).

What happens when a CD matures?

At maturity, most banks give you a 7–10 day grace period to withdraw funds, transfer, or reinvest without penalty. If you do nothing, the CD typically auto-renews at the current rate for the same term — which may be significantly lower than your original rate if rates have dropped. Set a calendar reminder before your CD matures so you can compare rates and shop around before it rolls over.

Should I choose a CD or a high-yield savings account?

It depends on your timeline and need for liquidity. HYSAs offer similar rates to short-term CDs (4%–5%) with full liquidity — you can withdraw anytime without penalty. CDs lock your money but guarantee your rate won't drop if interest rates fall. If you know you won't need the money for 6–12 months and want rate certainty, a CD can be the better choice. If you might need the funds or think rates will rise, stick with a HYSA.

Are CD interest earnings taxable?

Yes — CD interest is taxed as ordinary income in the year it is credited to your account, even if you don't withdraw it (for multi-year CDs). Your bank will send a 1099-INT at year end. To avoid this, you can hold CDs in a tax-advantaged account like an IRA, where earnings grow tax-deferred (traditional IRA) or tax-free (Roth IRA). Consult a tax professional for your specific situation.